EXHIBIT 10.5
WAIVER AND CONSENT
This waiver and consent (the “
Waiver ”) is entered into as of April 29, 2005, by and
among The Wet Seal, Inc., a Delaware corporation (the “
Company ”) and the buyers listed on the Schedule of
Buyers attached hereto as Exhibit A (each, a “
Buyer ” and, collectively, the “ Buyers
”). Unless otherwise defined herein or the context otherwise
requires, capitalized terms used herein and defined in the
Securities Purchase Agreement shall be used herein as therein
defined.
THE PARTIES TO THIS
AGREEMENT enter into this
waiver on the basis of the following facts, intentions and
understanding:
A. The Company and the Buyers
entered into that certain Securities Purchase Agreement, dated as
of April 29, 2005 (the “ Securities Purchase Agreement
”), and, upon the terms and subject to the conditions of the
Securities Purchase Agreement, the Company has agreed to issue and
sell to the Buyers an aggregate of (i) Twenty-Four Thousand Six
Hundred (24,600) shares of the Company’s Series C Convertible
Preferred Stock, $0.01 par value per share, issued pursuant to the
Company’s Certificate of Designations, Preferences and Rights
of Series C Convertible Preferred Stock related thereto, which
shall be convertible into shares of Class A Common Stock of the
Company, $0.10 par value per share (the “ Common Stock
”), and (ii) Warrants to purchase in the aggregate up to
Seven Million Five Hundred Thousand (7,500,000) shares of Common
Stock. In addition, the Buyers have agreed to exercise their Series
A Warrants (as defined in the Securities Purchase Agreement) and a
portion of their Series B Warrants (as defined in the Securities
Purchase Agreement) for up to Three Million Three Hundred
Fifty-Nine Thousand Nine Hundred and Ninety-Seven (3,359,997)
shares of Common Stock.
B. In accordance with Section 7(b)
of the Securities Purchase Agreement, the parties hereto have
agreed that, other than the Security Documents which shall be
effective on the Escrow Date in accordance with their respective
terms, each of the documents required to be delivered pursuant to
Section 7(a) of the Securities Purchase shall be executed and
delivered by the appropriate parties on April 29, 2005 (the “
Escrow Date ”) and, except for the documents listed on
Schedule 1 to the Securities Purchase Agreement, are dated as of
the Escrow Date, to be held in escrow by Akin Gump Strauss Hauer
& Feld LLP and Schulte Roth & Zabel LLP, and all actions
required to be undertaken pursuant to Section 7(a) shall be
completed, as the case may be, on or prior to the Escrow Date (the
“ Escrow Conditions ”).
C. The Company desires that each
Buyer waive each of the conditions to Closing set forth in Sections
7(a) (including, but not limited to, Section 7(a)(x) thereof),
except for Sections 7(a)(i) and (xi), which shall constitute the
only remaining conditions to each Buyer’s obligation to
purchase the Preferred Shares, the Warrants and the Closing
Exercise Shares on the Closing Date.
NOW, THEREFORE
, in consideration of the promises
and the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and each of the Buyers hereby
agree as follows:
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1.
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The Company
hereby certifies to each Buyer that as of the date hereof the
Escrow Conditions have been met.
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2.
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Each Buyer
hereby waives each of the conditions to Closing set forth in
Section 7(a) (including, but not limited to, Section 7(a)(x)),
except for Sections 7(a)(i) and (xi), which shall constitute the
only remaining conditions to each Buyer’s obligation to
purchase the Preferred Shares, the Warrants and the Closing
Exercise Shares on the Closing Date.
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3.
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The parties
hereto hereby acknowledge and agree that Deloitte & Touche LLP,
the Company’s independent auditors, may rely on this
Waiver.
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4.
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Each party
represents and warrants that this Waiver has been duly and validly
authorized, executed and delivered on behalf of the undersigned and
shall constitute the legal, valid and binding obligations of the
undersigned enforceable against such party in accordance with its
terms, except as such enforceability may be limited by general
principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.
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5.
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This Waiver
shall be effective as of April 29, 2005 and shall remain effective
provided that the documents held in escrow pursuant to Section 7(b)
of the Securities Purchase Agreement are released to the Buyers on
the Closing Date.
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6.
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All questions
concerning the construction, validity, enforcement and
interpretation of this Waiver shall be governed by the internal
laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State
of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Waiver
and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in
any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRI
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